US economy – “There is no denying it: among the best performing economies in 35+ years”

Mark Zandi is Chief Economist at Moody’s Analytics. He’s posted over the weekend a glowing review of the US economy.

I reckon there is a big warning in this … but first, he is what he said (in brief):

• with last week’s big GDP revisions, there is no denying it: This is among the best performing economies in my 35+ years as an economist
• Economic growth is rip-roaring
• full employment
• Inflation is fast closing in on Fed’s 2% target
• Households’ financial obligations are light
• Corporate profits are robust
• stock market is hitting a record high on a seemingly daily basis

So, what’s my warning? Well, twofold:

1. The Fed is slashing interest rates, 50bp so far and plenty more to come, so we are told

2. China is rolling out significant stimulus, and with more over the weekend

Not arguing with Zandi, I think he’s right. But … perhaps the FOMC should take the foot off the accelerator, or least lighten its touch.

Maybe China will export deflation and its all good?

Comments welcome.

This article was written by Eamonn Sheridan at www.forexlive.com.